At What Point Should I Take the Tax Hit on Unrealized Gains?

Benjamin, nearing retirement at 65, faces a familiar dilemma with his taxable account housing expensive mutual funds. Despite their underperformance, converting to low-cost index funds entails a significant tax hit due to long-held appreciable value. James explains weighing the immediate tax consequences against the risk of holding onto underperforming assets. He also provides a framework for assessing risk, identifying options, and making decisions based on personal financial goals. Questions Answered: How can you decide whether to sell underperforming mutual funds or continue holding onto them? What factors should you consider in determining whether converting to low-cost index funds aligns with your financial goals and risk tolerance? ======================= Learn the tips & strategies to get the most out of life with your money. Get started today → https://www.rootfinancialpartners.com/ Get access to the retirement software I use in this video and more → https://retirement-planning-academy.mykajabi.com/rpa 🔔 Make sure to subscribe here to be notified for future videos! https://www.youtube.com/channel/UCBNdQfS-fzODmYb8Hkr4egA?sub_confirmation=1 _ _ 👥 Make sure to connect with us on all socials below → https://beacons.ai/rootfinancialpartners ⏱Timestamps:⏱ 0:00 - Listener question from Benjamin 2:17 - Tail wagging dog? 3:52 - Benjamin’s situation 5:31 - WCS of selling vs not selling 11:17 - Be careful about tax drag 12:47 - Rethinking the break-even point 14:11 - Consider your goal for the money 17:17 - Identify the bigger risk 19:26 - Make your decision 20:26 - Will your tax situation change? 24:20 - Consider staggering sales 28:21 - Summary Other videos we think you'll like: About Root: https://www.youtube.com/watch?v=ZPy7Qlmemy8&t=1s Worried about retirement? Start here: https://www.youtube.com/watch?v=c1dCo73XTw4&t=1s